Accounting

Franchising offers alternative to partnership route

Published

2 years ago

January 14, 2025

One statistic really jumped out at me from the annual CPA Career Satisfaction survey co-authored by my friend Randy Crabtree of Tri-Merit. It was that firms providing ample career opportunities for employees not on the partner track have much better retention and employee engagement than firms that are still abiding by the “up or out” mindset.

From my podcasts and speaking engagements, I’d have to agree that many talented and highly motivated professionals are wondering whether the traditional partner track is still worth it considering the time, stress and strain on personal relationships (and health) it requires. Fortunately, more alternatives are emerging that can offer CPAs a great lifestyle and substantial financial upside.

Take Dark Horse CPAs, a nontraditional firm co-founded by Chase Birky. Birky started his career at a Big Four firm and then moved to a local firm before starting his own company. He formed Dark Horse to incorporate the best aspects of a big firm (bench strength and resources) with the best aspects of a small firm (intimacy, collegiality). This allows his people to be creative, autonomous and self-determining, not just chained to their desks and burned out.Enter the principal role.

Instead of sacrificing relationships with family, friends and spouses to garner one of your firm’s coveted partner slots, you can become a principal at firms like Dark Horse through the Accelerator Program. This can be especially intriguing to managers or senior managers at a traditional firm who are deciding whether to stick it out and try for becoming a partner.

The Dark Horse Principal Accelerator Program was created for entrepreneurially minded CPAs who want to build a scalable book of business without the personal and financial sacrifices required of starting a firm from scratch. Accelerators go through a training program that acclimates them to the firm’s tech stack, followed by sales training and one-on-one coaching. After completing the training, principals begin building their book of business by fielding inquiries from potential Dark Horse clients. To facilitate their growth, Accelerators have full-time and fractional professional personnel support at their disposal. After successful completion of the program, participants can become equity principals of the firm.

It’s an investment on Dark Horse’s part as well, “requiring four to nine months of intensive ‘X’s and O’s’ training and coaching,” said Birky.At the end of the training program, Birky said participants typically have a book of business worth $200,000 and they’re eligible to become principals. “It’s similar to being a partner at a traditional firm,” said Birky. But, since Dark Horse is a C corp, its principals are W-2 employees who also have equity in the form of stock options, plus bonus potential based on the profitability of their book of business.

Not your typical one-third/one-third/one-third

Like Birky, I believe this approach is very different from the one-third/one-third/one-third model of a traditional firm. That’s when one-third of revenue goes out as partner compensation, one-third goes out for staffing, and one-third goes out in overhead. By contrast, Dark Horse runs specific P&Ls every day for each book of business so it can calculate how much of each principal’s profit goes into the profit split with the firm. That way, it always knows how much in direct expenses is being allocated to each principal. As a result of its leaner and more horizontal structure, Birky said Dark Horse principals are typically bringing home 40% to 50% of their revenue as compensation vs. 33% that’s more common in the industry. In essence, Dark Horse is accelerating each principal’s earning potential and eliminating the frustration of having to share staff. Likewise, team members don’t get frustrated by having eight different bosses making demands of them at the same time.

I can relate to that situation. When I was in the client accounting services practice of a large firm, I was a manager overseeing a team of a dozen people. I felt like I had nine or 10 bosses making requests of me at the same time, and my team was getting pulled in every direction. This kind of stress definitely took a toll on my team and I know it affected many of their marriages and relationships.

While I don’t have scientific research to back this up, I can tell you anecdotally there are a lot more second, third and fourth marriages at accounting firms than in the general population. I’ve also noticed a higher percentage of never-married employees in their 40s and 50s at larger firms than in the general U.S. population.

Fortunately, more firms are creating alternative paths for employees who want to excel, but who don’t want to “sell their soul to the firm” in order to make partner. Dark Horse’s Accelerator Program is one way for talented managers in our profession to retain some work-life balance. They want to make more money now; they don’t want to wait another five or ten years to make partner at a traditional firm.

CPA firm as C corp

Next, you may be wondering if there are any issues running a CPA firm as a C corp, the way Dark Horse does. In California, where Dark Horse was formed, it’s considered an accountancy corp, so it can be either a C corp or an S corp. Birky said Dark Horse originally went with the S corp to make things simpler, but it eventually converted to an C corp, so it can someday take outside investment. Birky said outside investors tend not to like S corps. Also, Dark Horse is a play for volume and scale, so it won’t be that far in the future when it will exceed the 100-shareholder limit for S corps.

Birky said Dark Horse offers stock options to staff members once they become principals, and then annual grants thereafter. But the firm also has ways for equity to get down to the staff level. When Dark Horse gives a grant to a principal, the firm might tell him or her: “Hey, you earned 20,000 shares. Would you like any of this share grant allocated to your team?”

If they say, “Yes, $5,000 should go to my accounting manager,” then they can allocate those shares as a restricted stock award. The employee gets taxed on the award, but they don’t have to pay to exercise it, Birky explained. Further, Dark Horse allows employees to sell up to 20% of their vested shares back to the firm, and the firm will buy those shares at the attractive 409(a) price because it is also issuing options at the same price. (Note: I cover partner model alternatives in more detail in my new book “Building a Sustainable Accounting Firm.”)

Clearly the accounting industry is evolving beyond the traditional partnership model. Firms like Dark Horse CPAs are offering lucrative alternatives that provide better work-life balance, increased earning potential and equity opportunities. These new models intentionally address burnout, retain talent and create more flexible career paths in the accounting profession. What’s not to like?

Accounting

Continuous Auditing Transforms Corporate ERPs

Published

5 days ago

July 21, 2026

Business Finance News

continuous auditing transforms corporate erps

As corporate accounting departments cross the threshold into late July 2026, the adoption of continuous, automated auditing systems has reached a definitive turning point. Driven by advances in artificial intelligence and deep integration with modern Enterprise Resource Planning (ERP) platforms, leading finance organizations are moving away from traditional, periodic post-hoc audits in favor of real-time, 100% transactional verification. This technological transition is redefining internal control environments, reducing compliance costs, and eliminating the structural delays inherent in legacy quarterly closing processes.

Unlike traditional auditing frameworks that rely on statistical sampling—a process that inevitably leaves operational blind spots—continuous auditing software monitors operational data feeds continuously. Every purchase order, electronic invoice, payroll disbursement, and cross-border wire transfer is automatically cross-referenced against established corporate governance parameters, regulatory tax schedules, and anti-fraud algorithms in real time. Anomalies or unauthorized ledger entries are flagged instantly, allowing internal audit teams to investigate and remediate compliance gaps immediately rather than months after the close of a financial period.

The implications for executive financial management are far-reaching. By embedding continuous verification directly into daily transaction workflows, chief financial officers gain uninterrupted visibility into the organization’s true financial standing. Real-time balance sheet auditing eliminates the severe operational bottlenecks associated with month-end and quarter-end financial reconciliations, freeing accounting professionals to focus on strategic financial modeling, tax planning, and capital allocation rather than manual data entry and spreadsheet consolidation.

However, implementing continuous auditing requires accounting leadership to invest heavily in data governance and technical upskilling. Internal audit teams must evolve from manual ledger reviewers into system architects capable of auditing complex algorithms and validating automated data pipelines. Accounting firms and corporate controllers that master continuous auditing will establish a resilient compliance framework capable of meeting stringent international regulatory standards with total transparency.

Accounting

U.S. Imposes New 50% Tariffs on Canadian Imports Under Rare Legal Provision

Published

6 days ago

July 20, 2026

Business Finance News

U.S. Imposes New 50% Tariffs on Canadian Imports Under Rare Legal Provision

WASHINGTON — In a major escalation of cross-border trade friction, U.S. President Donald Trump has signed executive orders imposing new 50% tariffs on a wide selection of Canadian exports, citing discriminatory practices by Ottawa targeting American auto, dairy, and beverage industries.

The new duties, announced Monday, will take effect in 30 days. They target a broad spectrum of consumer and industrial goods—ranging from wine, liquor, and milk products to commercial cement, furniture, clothing, and hockey equipment.

Untested Legal Mechanism

To enact the sweeping measures, the administration invoked Section 338 of the Tariff Act of 1930—a rarely used legal provision allowing the executive branch to levy additional tariffs of up to 50% on foreign nations deemed to discriminate against U.S. commerce.

White House officials noted that Section 338 addresses trade discrimination rather than national security or economic emergencies. The move comes months after prior global emergency tariffs faced legal challenges in domestic courts, signaling Washington’s pivot toward alternate statutory authorities to maintain import duties.

Senior administration officials briefed reporters that the measure directly responds to Canadian provincial bans on U.S. alcohol, restrictions on American vehicle exports, and import quota disparities affecting U.S. dairy and cheese producers relative to third-party trading partners.

“While the administration continues to secure reciprocal trade agreements globally, Canada retaliated against efforts to protect domestic industry,” U.S. Trade Representative Jamieson Greer stated.

USMCA Impact and Carve-Outs

Significantly, the newly ordered 50% duties will apply to designated items even if they otherwise comply with the United States-Mexico-Canada Agreement (USMCA).

However, the administration confirmed key targeted exemptions:

Energy products (including oil and natural gas)
Potash and critical minerals
Fish and seafood
Goods already governed by sector-specific duties (such as existing steel and aluminum tariffs)

Administration representatives emphasized that the tariffs do not stem from recent disputes concerning drifting Canadian wildfire smoke, noting that policy options regarding environmental spillover remain under separate review.

Canadian Response and Market Reaction

Following the White House announcement, the Canadian dollar experienced a sharp decline against the U.S. dollar, falling approximately 0.4% during evening trading.

Canadian Prime Minister Mark Carney issued a statement emphasizing that Canada’s earlier counter-duties had merely matched previous U.S. trade actions. “Canada stands ready to engage intensively to address outstanding issues with the U.S. to the mutual benefit of our citizens,” Carney stated, pointing to detailed proposals Ottawa submitted to modernize the USMCA framework.

Ontario Premier Doug Ford took a firmer stance, urging a “dollar-for-dollar” reciprocal response if the measures go into effect on August 19.

With a 30-day implementation window before the duties officially lock in, industry associations and trade groups on both sides of the border are calling for urgent bilateral negotiations to avert further supply chain disruption across North America.

Accounting

Automated Continuous Auditing: Transforming Compliance and Real-Time Financial Oversight

Published

6 days ago

July 20, 2026

Business Finance News

Transforming Compliance and Real-Time Financial Oversight

The traditional accounting paradigm—defined by periodic monthly closures and post-hoc annual audits—is rapidly giving way to continuous, automated financial oversight. As of July 2026, forward-thinking accounting practices and multinational corporate finance departments are leveraging continuous auditing systems powered by advanced machine learning models. These systems monitor operational transactions in real time, shifting audit methodologies from sample-based post-analysis to absolute, 100% transaction-level verification.

The operational advantages of continuous auditing are transformative. Standard auditing procedures historically relied on statistical sampling, which, despite rigorous methodology, inherently left gaps where anomalies or fraudulent transactions could go undetected for months. Modern continuous auditing platforms integrate directly with enterprise resource planning (ERP) databases, instantly cross-referencing purchase orders, invoices, bank feeds, and tax records. Any deviation from established control parameters or unusual transaction behavior triggers immediate flags for internal audit teams, dramatically reducing detection lag from quarters to seconds.

Beyond fraud prevention, continuous auditing fundamentally alters internal reporting and decision-making. Executive leadership no longer has to wait weeks after the close of a quarter to evaluate precise financial standing; real-time verified ledger data provides an uninterrupted view of operating margins, tax liabilities, and cash flow dynamics. This real-time visibility enables corporate controllers to adjust capital allocation strategies dynamically, mitigating liquidity constraints and capitalizing on emerging commercial opportunities far more efficiently than competitors bound to legacy reporting cycles.

However, implementing continuous auditing requires accounting professionals to acquire new analytical capabilities. The role of the auditor is evolving from manual data reconciliation toward system validation, algorithmic model governance, and strategic risk interpretation. Accounting firms and corporate finance departments must invest in continuous technical education, ensuring that audit staff possess the data engineering skills necessary to design, maintain, and evaluate complex automated compliance systems.